Investigate the impact of human capital, economic freedom and governance performance on the economic growth of the BRICS

Purpose This paper investigates the relationship between human capital, economic freedom, governance performance, and economic growth and whether institutional factors such as governance performance and economic freedom mediate the association between human capital and economic growth. Design/methodology/approach In this study, the authors apply the panel data regression method to verify five hypotheses and check the robustness of the empirical findings from four aspects (chow test, panel unit root test, granger test and generalized method of moments) based on the data covering China, India, Russia, Brazil and South Africa from 2000 to 2018. Findings After multiple tests with mixed methods, the empirical results show that the relationship between human capital and economic growth is not linear but inverted U-shaped. Furthermore, human capital has a positive effect on economic growth only in a certain period of time, and governance performance positively moderates the effect of human capital on economic growth in BRICS. Originality/value First, the impact of human capital on economic growth is not linear but an inverted U-shaped and governance performance moderates the effect of human capital on economic growth in BRICS. The study and research model enhances the authors' insights on the advantage and challenges of human capital in the future. Second, the proposed multi-methods in the study accurately forecast economic growth which partially solves endogenous problems because of reverse causality.